The Digital Infrastructure Divide in the Commonwealth - Trade Competitiveness Briefing Paper - Radika Kumar and Niels Strazdins
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ISSN 2520-291X 2021/01 Trade Competitiveness Briefing Paper The Digital Infrastructure Divide in the Commonwealth Radika Kumar and Niels Strazdins
Trade Competitiveness Briefing Paper 2021/01 ISSN 2520-291X © Commonwealth Secretariat 2021 By Radika Kumar and Niels Strazdins. Radika Kumar is Adviser for Infrastructure Policy and Niels Strazdins is Trade Specialist at the Commonwealth Secretariat. The authors wish to acknowledge Opeyemi Abebe, Adviser and Head of Trade Competitiveness, Kirk Haywood, Acting Head of the Commonwealth Connectivity Agenda, and Abdoulie Jammeh of the Gambia, lead for the Physical Connectivity Cluster of the Commonwealth Connectivity Agenda, for their contribution, support and insights. Please cite this paper as: Kumar, R and N Strazdins (2021), ‘The Digital Infrastructure Divide in the Commonwealth’, Trade Competitiveness Briefing Paper 2021/01, Commonwealth Secretariat, London. The Trade Competitiveness Briefing Paper series provides evaluative and strategic research on new and emerging trade issues of relevance to the Commonwealth member countries. The series focuses on the practicalities of addressing these new issues as well as long existing (but still very current) policy challenges in a time-bound, targeted and effective manner; taking into account both opportunities and challenges that emerge due to changes in global trade landscape. The views expressed here are those of the author(s) and do not necessarily represent those of the Commonwealth Secretariat. For more information, contact the Series Editor: Opeyemi Abebe, o.abebe@commonwealth. int. Abstract This paper assesses infrastructure using various parameters including access, affordability and performance. It considers the hard/soft infrastructure divide, which includes literacy as a human capital investment in the digital economy. Furthermore, it assesses the gender digital divide in relation to digital infrastructure for sustainable and inclusive development. The COVID-19 pan- demic has highlighted the importance of sound digital infrastructure for economic sustainability in Commonwealth member countries. It has also resulted in a major digital infrastructure divide that has affected economic activities across the Commonwealth. The Physical Connectivity Cluster of the Commonwealth Connectivity Agenda, led by The Gambia, has developed the ‘Agreed Principles on Sustainable Investment in Digital Infrastructure’ which identify six core areas of infrastructure development. This paper provides further technical analysis of infrastructure – including digital infrastructure – as a core component to accelerate economic recovery. It finds that a digital divide exists within and across the Commonwealth, at different levels. It asserts that digital infrastructure gaps must be addressed through effective and targeted interventions as Commonwealth countries further develop their economies. JEL Classifications: I15, O10, O30 Keywords: digital infrastructure, economic development, digital economy, COVID-19, Commonwealth
Trade Competitiveness Briefing Paper 2021/01 3 Contents 1. Introduction 4 2. Infrastructure and sustainable economic development 5 3. Synergy between basic and digital infrastructure 6 4. Digital divide and infrastructure gaps in the Commonwealth 8 4.1 Digital infrastructure in Commonwealth countries 8 4.2 Digital divide in relation to the affordability of digital infrastructure 13 4.3 Digital divide in relation to literacy and software and application services 16 4.4 Digital divide in relation to gender in the Commonwealth 19 5. Conclusion and policy recommendations 23 Notes 25 References 25 Annex 1. Key economic indicators for selected Commonwealth countries, by region (2019) 26 Annex 2. Data indicator and source 31
4 The Digital Infrastructure Divide in the Commonwealth 1. Introduction Infrastructure is a vital conduit for the effective equalisation of the remuneration of comparable functioning of economies. A well-functioning inputs. (Jochimsen, 1966). Infrastructure using infrastructure ecosystem acts as an enabler three sub-categorical terms includes insti- for economic development, contributes to the tutional infrastructure, personal infrastruc- competitiveness of economies, and facilitates ture and material infrastructure. Institutional trade and investment. The productive use of infrastructure is provided by the government infrastructure can reduce the global infrastruc- and comprises the rules and procedures for ture bill by 40 per cent, equivalent to US$1 tril- implementing and activating the economic lion annually, creating savings that could boost potentialities of economic agents. Personal economic growth by about 3 per cent or more infrastructure is represented by the number than US$3 trillion by 20301 (Bailey et al. 2014). and the properties of the working population One of the largest constraints to economic that influence the economic potentialities of development has been inadequate infrastruc- the economic agents. Material infrastructure ture in developing countries. For developing refers to capital stock that serves the function countries in Asia Pacific, US$22.6 trillion in of mobilising the economic potential of agents infrastructure investment will be needed from (Buhr 2003). 2016 to 2030, equating to US$1.5 trillion per For the purpose of analysis, this paper focuses year, if the region is to maintain growth and on ‘hard’ and ‘soft’ infrastructure. Hard infra- eradicate poverty. This figure would increase structure includes the physical systems that are to US$26 trillion if additional investment of required to run a nation. These include basic US$1.7 trillion per year was included for cli- and critical infrastructure such as roads, high- mate change mitigation costs2 (Department of ways, bridges, telecommunications and energy, Foreign Affairs & Trade 2020). among others. The hard infrastructure compo- There exist major gaps in relation to the nent also comprises the information technol- access, quality and affordability of infrastruc- ogy (IT) and digital infrastructure that enables ture across the Commonwealth. Factors such the reach to last mile users (the end users) Soft as increases in population, urbanisation, health infrastructure includes human capital that is and safety concerns, environmental consider- used to deliver services and complements hard ations, financing capacity, international trade, infrastructure. and the rise in digital technology affect access The Physical Connectivity Cluster of the to, affordability and quality of infrastructure Commonwealth Connectivity Agenda has (Global Infrastructure Hub 2020). developed the overarching ‘Principles of Sustainable Development Goal 9 (SDG 9) Sustainable Investment in Digital Infrastructure’. further accentuates the important role infra- These comprise six core principles for mem- structure plays in sustainable and inclusive ber states of the Commonwealth to implement development. It identifies that inclusive and in order to contribute to the achievement of a sustainable industrialisation, along with inno- US$2 trillion of trade and investment target vation and infrastructure, can unleash dynamic by 2030. However, with COVID-19 and the and competitive economic forces that gener- resulting global economic recession, trade and ate employment and income3 (United Nations investment around the world have been severely 2015). impacted. According to a recent Commonwealth Infrastructure can be defined in several ways. survey on the economic response to COVID- To begin with, infrastructure can be used to 19, infrastructure will be a critical component describe the interconnectedness of organisa- for the economic recovery of Commonwealth tion structures that underpin society, thereby member countries following the pandemic. enabling it to function effectively.4 Furthermore, (Commonwealth Secretariat 2021). infrastructure is also defined as the total of all COVID-19 has underscored the importance material, institutional, personal and data infra- of the deeper digitalisation, highlighting the structure, which is available to economic agents core issue of providing sound and conducive and which contributes to the realisation and the digital infrastructure to enable Commonwealth
Trade Competitiveness Briefing Paper 2021/01 5 economies to accelerate their economic recov- if member states are to understand their posi- ery. Closing the digital infrastructure divide tion and develop effective targeted policies for and focusing on the development dimension of intervention. infrastructure needs, through effective policy The paper is structured as follows: Section 2 imperatives, will be key to the economic recov- discusses the nexus between infrastructure and ery of Commonwealth member states. sustainable economic development; Section 3 Against this backdrop, the paper aims to outlines the synergy between basic infrastruc- provide technical analysis to member states ture and digital infrastructure as complements on the role of infrastructure – including digi- to digitalisation; Section 4 discusses the digital tal infrastructure – as a core component to divide in relation to the infrastructure gaps that accelerate their economic recovery. In under- exist between Commonwealth countries; and, taking the analysis, assessment of the digital finally, Section 5 provides conclusions and pol- divide in relation to infrastructure is important icy recommendations. 2. Infrastructure and sustainable economic development Infrastructure is a component of capital invest- efficient transportation systems and the supply ment in overall gross domestic product, which chain, coupled with information communica- is either funded by the government or the pri- tions technology (ICT) applications to track vate sector, depending on whether the financed raw materials and finished products (Rezza infrastructure is a public or a private good. Soft et al. 2017). infrastructure investment, such as education In relation to infrastructure and trade facilita- and training, is a part of government and pri- tion, a study on the correlation between the two vate sector investments aside from the accumu- identified that African countries could improve lated capital investments in hard infrastructure. global value chain integration by improving Investment in infrastructure is likely to increase infrastructure. Maritime and air connectivity during periods of high economic growth and were identified as major determinants of value- recovery, as opposed to when economies are added performance, together with regional col- in recession. However, evidence suggests that laboration. Furthermore, strong relationships investment in infrastructure for economic were found to exist between infrastructure and recovery leads to higher levels of economic trade facilitation improvements with trading growth and improved levels of competitiveness partners. As such, in order to improve value for countries. Infrastructure enables businesses chain connectivity, well-functioning infra- to generate additional production capacity and structure in trading partners is also important. reduces the cost of inputs and transaction costs. Digital technology also plays a major role in Furthermore, investment in soft infrastructure economic development and needs to be sup- increases the productivity of workers and job ported with sound infrastructure. As economies opportunities (Palei 2015). With COVID-19 move toward digitalisation, digital infrastruc- and increased demand for digitalisation, the ture is the foundation that enables businesses development of soft infrastructure is para- to move into higher value-added segments in mount for economic recovery. all value chains and reach digital maturity. For Infrastructure investment has a direct effect example, without high-speed networks and on production processes and improves supply highly secured available and reliable data cen- chain resilience. As such, supply chain man- tres, there would be no level of digitalisation for agers need to focus on developing regional businesses of any size. (Waldhauser 2019). and local infrastructure in order to improve Furthermore, infrastructure is an enabler production processes and increase efficien- of trade facilitation. In a study on the linkages cies. There are further benefits associated with between infrastructure and trade facilitation
6 The Digital Infrastructure Divide in the Commonwealth in African countries, infrastructure improve- Southeast Asian countries in terms of attract- ment was emphasised as an area that required ing FDI (Bakar et al. 2012, 205–211). Another attention in sub-Saharan Africa (SSA) to enable study relating to the impact of infrastructure countries in the region to move up global value development on FDI in Cameroon, revealed chains, thus reinforcing the need for high-qual- that communication infrastructure improve- ity and well-connected infrastructure (Shepherd ments had a positive impact on FDI in both the 2017, 1–22). short and long terms (Nguea 2020). Moreover, infrastructure also influences the In the Pacific region, a study on the impact level of foreign direct investment (FDI) coun- of telecommunications infrastructure on eco- tries attract. A country with good infrastruc- nomic growth, revealed that growth in the tele- ture is likely to attract greater levels of FDI as communications sector had a positive influence investors usually search for markets where ben- on output per worker. The study revealed that efits can be maximised and costs of production a 1 per cent increase in telecommunications reduced. This can be achieved if the infrastruc- access through telephone connectivity contrib- ture is in good condition and provides adequate uted to a 0.33 per cent short-term increase and support to industry. For example, Malaysia has a 0.43 per cent long-term increase in worker been able to capitalise on its high-quality infra- productivity (Kumar et al. 2015, 284–295). structure to become one the most successful 3. Synergy between basic and digital infrastructure This section of the paper will examine in detail nation or region. Digital infrastructure com- the interrelationship between basic infrastruc- prises the internet backbone, which includes ture and digital infrastructure for last mile principal data routers through which networks users. In order to have a well-functioning digi- of different nations and regions are connected tal infrastructure ecosystem, it is imperative to form the internet. These include submarine that economies have access to affordable and communication cables and facilities that are quality basic infrastructure. In relation to the used by tier 1 networks for interconnections. integration of such technology for infrastruc- Fixed broadband services are also an example ture, both the information technology (IT) and of digital infrastructure that connect regions digital infrastructure needs of countries have and cities with wired internet, enabling last to be ascertained, as they are complementary mile connections to businesses, data centres components of efficiently functioning digi- and households. Mobile telecommunications tal economies. IT infrastructure includes the and cellular networks, which provide wireless basic hardware, software and facilities on which broadband internet and communication ser- information technology services are developed. vices as well as communication satellites, are These include network equipment (routers); also important digital infrastructure compo- telecom services that provide internet con- nents, providing network or information ser- nectivity to leased lines; computer hardware, vices. Wi-Fi networks are an important enabler including basic software and operating systems; in the digital economy, supporting, for exam- facilities to house infrastructure such as data ple, the Internet of Things (IoT): encompassing centres; power generation capabilities, such as advanced digital infrastructure, which includes solar panels at data centres and solar battery robots, machines, sensors, and other facilitat- systems; backup power generators to provide ing infrastructure, products and vehicles that redundancy; and computing platforms, such as use Wi-Fi networks. cloud computing and information security via Coupled with these digital components, basic hardware and software systems for intrusion infrastructure providing water, energy, roads, detection. ports and telecommunications infrastructure Digital infrastructure components include are pre-requisites for information technology the basic services that are necessary to enable and digital infrastructure. For example, hard the information technology capabilities of a telecommunications infrastructure is required
Trade Competitiveness Briefing Paper 2021/01 7 for the transmission of electronic waves and bandwidth and Wi-Fi for internet access. The the internet to digital devices, for them then to telecoms sector is dependent on energy, ports connect to end-users. Ports, roads and energy and road infrastructure for the set-up of fibre are required for the construction of fibre optic optics and transmitters. Countries with well- cable networks that facilitate the functioning of developed basic infrastructure are able engage digital infrastructure, such as data centres for in the digital economy at a faster rate in com- cloud computing services or technologies such parison to those that lag behind in this area. as block chain technology to allow countries to Several enabling digital tools depend on localise data. basic infrastructure to function in the digital Hard telecommunications infrastructure economy. Enabling digital infrastructure ranges plays many other important facilitating and from mobile phones, to block chains and dis- enabling roles. In order to have robust cloud tributed ledgers, to online tools, including infrastructure, with localised data centres, a Infrastructure as a Service (IaaS) applications, country must have a cost-effective energy sector. Platform as a Service (PaaS) applications and The role of the telecommunications infrastruc- Software as a Service (SaaS) application. ture is critical in enabling such affordability. Depending on the nature of the business, the Mobile technologies that use cellular data use demand for different IT infrastructure varies. wired networks, and thus require investment in For example, micro, small and medium-sized network fibre optics. High-speed and high-fre- enterprises (MSMEs) and small and medium- quency wireless technologies require investment sized enterprises (SMEs) may require good in transmitters to provide access to adequate telecom infrastructure to facilitate high-speed Figure 1. Synergy between hard and soft digital infrastructure
8 The Digital Infrastructure Divide in the Commonwealth internet access and the use of mobile technol- interlinked components. Figure 1 provides an ogy as an enabler to access to SaaS for business example of the synergy between basic infra- applications. On the other hand, for businesses structure, IT and digital-enabling infrastruc- that are larger scale and at higher levels of digital ture. In addition to these, soft infrastructure, maturity, data security issues and IT infrastruc- capacity building and the training of person- ture affordability may become more impor- nel to operate the infrastructure is also critical. tant. These businesses may utilise IaaS, coupled Given that digitalisation correlates with agile with high-speed internet access for their own development, the development of skills and tailor-made platforms and software services for capacity should be a continuous process. The business operations. In the latter case, the data COVID-19 pandemic has highlighted the need would be stored in-country. for deeper digitalisation and increased connec- For a well-functioning digital infrastructure tivity with and among countries. Addressing ecosystem, Commonwealth countries must digital infrastructure divides is integral to eco- consider basic infrastructure, IT infrastruc- nomic recovery from the pandemic, as well as ture and digital-enabling infrastructure as key to adapting to new business environments. 4. Digital divide and infrastructure gaps in the Commonwealth The 54 Commonwealth member countries are • The Commonwealth Pacific region at different stages of development. Some econo- (Australia, Fiji Islands, New Zealand, Papua mies are more advanced than others and across New Guinea, Samoa, Tonga and Vanuatu) the Commonwealth, countries are at various levels of digital engagement and digital matu- 4.1 Digital infrastructure in rity (see Annex 1). As a result, for the digital Commonwealth countries economy and digital trade to develop, the con- For well-functioning enabling digital infra- cerns of the digital divide in relation to the structure – such as mobile technologies, cloud infrastructure needs must be addressed. storage and other software as a service (SaaS) This section provides a comparative analy- applications.– to operate, countries must have sis of the digital infrastructure gap among the adequate underlying hard digital infrastructure Commonwealth’s five regions, based on avail- in place that ensures reasonable internet con- able data: nectivity for efficient functioning of these appli- • The Commonwealth Asia region cations to reach end users. (Bangladesh, Brunei Darussalam, India, In order to assess access to and quality of Malaysia, Maldives, Pakistan, Singapore digital infrastructure, four components need to and Sri Lanka) be analysed: network coverage, network perfor- • The Commonwealth Europe region mance, enabling infrastructure and spectrum (Cyprus, Malta and the United Kingdom) allocation: • The Commonwealth Africa region (Botswana, Eswatini, The Gambia, Ghana, 1. Network coverage: this reflects the strength Lesotho, Malawi, Mozambique, Namibia, of the network coverage for Commonwealth Nigeria, Rwanda, Sierra Leone, South countries, measured as a percentage of the Africa, Uganda and Zambia) population covered by 2G, 3G, 4G or 5G net- • The Commonwealth Caribbean and works. The generation of network coverage Americas region (The Bahamas, Barbados, measures the range of coverage: for example, Canada, Guyana, Jamaica, Saint Lucia, Saint 4G provides greater coverage than 2G. Vincent and the Grenadines, and Trinidad 2. Network performance: this reflects the and Tobago) speed of the internet, measured by
Trade Competitiveness Briefing Paper 2021/01 9 average mobile broadband download and in relation to digital and enabling infrastructure upload speeds and broadband latencies. and where gaps exist in the Commonwealth. Network performance is an important factor to ensure that information/data is efficiently exchanged and is an important Commonwealth Asia factor in ensuring competitiveness and Figure 2 shows the digital infrastructure per- facilitating business operation in the digi- formance of the Commonwealth Asia region, tal economy. based on network coverage, network perfor- 3. Other enabling basic infrastructure: this mance, other enabling infrastructure and spec- reflects the percentage of the population trum allocation. that has access to basic infrastructure such It is clear that the economies are operating at as electricity, telecommunications, internet different levels in relation to digital infrastruc- bandwidths, secure servers and internet ture across Commonwealth Asia. exchange points. In relation to network coverage, all the coun- 4. Spectrum allocation: this is an important tries – with the exception of Pakistan – had a requirement for cellular companies in network coverage score of 80 and above, indi- transmitting data, as different technologies cating high rates of network coverage for most have different ranges. Allocation per opera- of the population. However, in terms of net- tor is measured by digital dividend spec- work performance, or the speed of the internet trum per operator, from 1 GHz -3GHz .or in relation to the average mobile broadband above per operator download, upload and latency speeds, Singapore outperformed other regional econo- In order to measure underpinning digital infra- mies by a wide margin, with a score of 96 com- structure performance, an analysis of these four pared to Malaysia, which ranked second with a areas allows for an assessment of the digital score of 63. Other Commonwealth Asia coun- divide within and across the Commonwealth. try scores ranged from 52 to 38. The data for the analysis has been sourced from On other enabling infrastructure, measuring GSMA with each component having different the percentage of the population with access to indicators sourced from various databases as basic infrastructure, Singapore outperformed per Annex 2. The analysis reflects scores of each other countries, with an enabling infrastructure component ranging from 0–100, with 0 being score of 93 compared to the regional range of the lowest and 100 being the highest. It provides 48–73. The South Asian countries of Pakistan, a basis to show how economies are performing Bangladesh, Sri Lanka and India scored the Figure 2. Digital infrastructure performance – Asia Infrastructure performance score (units) 100 90 80 70 60 50 40 30 20 10 0 m re ia s a ka sh an ve di la ys o an e st In sa ap di ad a ki iL al al us ng l Pa ng M Sr M ar Si Ba D ei un Br Network coverage Network performance Other enabling infrastructure Spectrum Source: GSMA database and authors’ own depiction
10 The Digital Infrastructure Divide in the Commonwealth Figure 3. Digital infrastructure performance – Europe Infrastructure performance score 100 80 60 40 20 0 Network coverage Network Other enabling Spectrum performance infrastructure United Kingdom Malta Cyprus Source: GSMA database and authors’ own depiction lowest in the Asia region, ranging between 48 infrastructure, which relates to the percentage and 65, with Pakistan being the lowest. of the population with access to basic infra- Regarding spectrum allocation, these structure, such as electricity and basic telecom- scores are important indicators to determine munications infrastructure. Cyprus and Malta how the cellular companies operating in the had a score of 87, whereas the UK had a score Asia region are able to transmit data. For the of 83. Commonwealth Asia region, Singapore scored The spectrum allocation scores are important the highest at 71 in relation to spectrum allo- indicators in determining how cellular compa- cation for companies to transmit data. On the nies operating in Commonwealth Europe are other hand, it is interesting to note that econ- able to transmit data. Despite overall perfor- omies with the largest populations, such as mance being better than other Commonwealth Pakistan, Bangladesh and India, ranked lowest regions, this is an area which could be further in relation to spectrum allocation and trans- improved. Cyprus had a score of 58, the UK mission of data, with scores of 20 to 22. was at 57 and Malta was at 56 – all of which lagged the performance of Singapore in the Commonwealth Europe Commonwealth Asia region, for example. In the Commonwealth Europe region, while economies still differed in terms of infrastruc- Commonwealth Africa ture development, these differences were nar- Commonwealth Africa’s digital infrastruc- row in comparison with other regions. ture performance varied significantly across In relation to network coverage, all the coun- countries. tries in the Europe region had scores of 89–98, In terms of network coverage, while South led by the United Kingdom with a score of 98. Africa, Lesotho and Rwanda had a network While this shows that in relation to network coverage score of 80 and above, countries such coverage, a wide range of the Commonwealth as The Gambia, Zambia, Sierra Leone, Namibia Europe population enjoy high levels of access, and Mozambique had low network coverage, the region scored relatively low in terms of net- with scores of 60 and below, illustrating the work performance. This determines the speed digital divide in the region. of the internet in relation to average mobile Network performance reflects the speed broadband downloads, uploads and latencies. of the internet, measured as average mobile The United Kingdom had the highest score of broadband download, upload and latencies. 76 on network performance, followed by Malta Commonwealth Africa as a whole was found at 61 and Cyprus at 58. The network perfor- to be lagging behind relative to other regions, mance of the Europe region was higher relative which exacerbates a number of other digital to other regions of the Commonwealth. economy challenges – including digital trade Commonwealth Europe also performed facilitation, provision of efficient e-government better than other regions on other enabling services, and private sector competitiveness.
Trade Competitiveness Briefing Paper 2021/01 11 Figure 4. Digital infrastructure performance – Africa Infrastructure performance score 90 80 70 60 50 40 30 20 10 0 da o ria a ia a i a da i a a e e aw in n ric bi an bi qu on th ib at ha an an ge m am al m so w Af bi Le w G Rw Ug Za M Ni ts Na am Le Es G h ra Bo ut e oz er Th So Si M Network coverage Network performance Other enabling infrastructure Spectrum Source: GSMA database and authors own depiction Lesotho was the highest scoring in terms of net- are able to transmit data. For the African work performance, with a score of 53, followed region, overall spectrum allocation scores were by South Africa at 52 and Namibia at 47. much lower compared to other regions such On other enabling infrastructure, the digital as Asia and Europe. Rwanda and Lesotho per- infrastructure divide was even greater in relation formed best in the region, with scores of 65 and to percentage of the population having access 52 respectively, but these were still low relative to basic infrastructure in the Commonwealth, to other regions. For the rest of the region, the implying a large percentage Africa’s population spectrum allocation score was below 35, with did not have basic infrastructure for the digi- Botswana, The Gambia and Sierra Leone having tal economy – such as electricity, roads, water, the lowest scores of 14, 13 and 8 respectively. internet bandwidth, telecommunications infra- structure and secure servers. The overall score Commonwealth Caribbean and Americas of the African Commonwealth region was region poor in comparison with other regions. South Figure 5 shows the digital infrastructure perfor- Africa had a score of 61, followed by Eswatini mance for the Caribbean and Americas region at 56 and Botswana at 53. The lowest range and illustrates the region’s digital divide. scores for enabling infrastructure were those of In relation to network coverage, almost all Mozambique (with a score of 30), Malawi (24) countries in the region scored relatively highly, and Sierra Leone (15). with the exception of Guyana. Canada and The Spectrum allocation scores are important Bahamas led, with a network coverage score indicators to determine how cellular companies of 89, followed by Trinidad and Tobago and Figure 5. Digital infrastructure performance – Caribbean and Americas Infrastructure performance score 90 80 70 60 50 40 30 20 10 0 Canada Trinidad and The Saint Jamaica Barbados Guyana Saint Lucia Tobago Bahamas Vincent and the Grenadines Network coverage Network performance Other enabling infrastructure Spectrum Source: GSMA database and authors own depiction
12 The Digital Infrastructure Divide in the Commonwealth Figure 6. Digital infrastructure performance – Pacific Infrastructure performance score 100 90 80 70 60 50 40 30 20 10 0 Australia New Zealand Papua New Fiji Samoa Tonga Vanuatu Guinea Network coverage Network performance Other enabling infrastructure Spectrum Source: GSMA database and authors own depiction Barbados, with scores of 86, and Jamaica with shown in Figure 6 which illustrates the digital 80. Guyana had the lowest network perfor- divide across these countries. mance score of 47, indicating the low strength In relation to network coverage, Australia of its network coverage as percentage of total and New Zealand scored highest at 99, indi- population. Relative to the African and Pacific cating near complete coverage for their popu- regions, Commonwealth Caribbean and the lations. Fiji also had good network coverage, Americas countries performed well. with a score of 87, followed by Samoa with 84. For network performance, Canada per- Tonga and Vanuatu also performed relatively formed best on internet speed, with a score well, with scores of 78 and 76, respectively. of 88, contrasted by the Caribbean countries However, Papua New Guinea, despite being one where low internet speeds impacts their online of the largest economies in the Pacific, had the connectivity and digitalisation. Barbados and region’s lowest coverage score of 47. Trinidad and Tobago’s network performance In relation to network performance, Australia scored highest at 58 and 50, respectively, while and New Zealand again led with scores of 92 rest of the Caribbean countries had network and 87, with Tonga and Vanuatu having the performance scores below 50, with Saint Lucia lowest internet speeds with scores of 36 and 37 having the lowest score of 33. respectively. On other enabling infrastructure, access to On enabling infrastructure – measuring basic infrastructure – such as electricity, inter- access to basic infrastructure such as electric- net bandwidth per internet servers and internet ity, internet bandwidth per internet servers exchange points – the region’s overall perfor- and internet exchange points – Australia and mance was better relative to other regions such New Zealand had the highest scores and out- as Africa and the Pacific. Barbados, Canada performed the other countries in the Pacific and Saint Vincent led, with the regions highest region, with scores of 87 and 86, respectively. enabling infrastructure scores of 81, 79 and 77, The low scores in other Pacific countries illus- respectively. trate the need for basic infrastructure develop- Spectrum allocation scores, which measure ment in the region, with Papua New Guinea the effectiveness of cellular companies in trans- scoring the lowest at 47. mitting data, showed mixed results. Canada per- In relation to spectrum allocation, measur- formed highest in the region, with a score of 65, ing the effectiveness of cellular companies to followed by Trinidad and Tobago (score of 56) transmit data, Australia and New Zealand had and The Bahamas with score of 51. Saint Lucia the highest score, both at 75, which was also had the lowest spectrum allocation score at 11. the highest spectrum allocation score in the Commonwealth. The rest of the Pacific lagged Commonwealth Pacific behind, with Samoa, Tonga and Vanuatu Moving to the Commonwealth Pacific, the having the lowest scores of 31, 24 and 16, region’s digital infrastructure performance is respectively.
Trade Competitiveness Briefing Paper 2021/01 13 4.2 Digital divide in relation to the In terms of the mobile tariff scores, Singapore affordability of digital infrastructure ranked highest with a score of 91, indicating high internet affordability thanks to the low cost In assessing the digital divide across the of mobile data. Sri Lanka ranked second, with a Commonwealth, the affordability of enabling score of 81, followed by India with 72. The rest tools that connect last mile users is an addi- of the Commonwealth Asia region had reason- tional parameter that must be considered. This able costs for data, with Brunei Darussalam involves measuring the affordability of digital scoring lowest with 60. tools such as mobile technology and handheld On handset prices, Singapore’s perfect score devices. Differences in the affordability of these of 100 indicated that the cheapest internet- enabling tools can create and/or widen digital enabled devices were affordable by its popu- divides across the Commonwealth. lation in terms of a percentage of monthly To assess digital infrastructure affordability GDP per capita. This was followed by Brunei in Commonwealth countries, the following fac- Darussalam at 71 and India at 62. The cost tors were considered: of handsets was higher in other countries in 1. Mobile tariffs: measured at the cost of Commonwealth Asia relative to income levels, 100MB–5GMB data in terms of the per- with those in Pakistan being least affordable centage of monthly gross domestic product with the lowest score of 35. (GDP) per capita. The amount of tax paid on enabling mobile 2. Handset prices: measured at the cost of the technologies is also a factor that affects cheapest available internet-enabled devices, affordability and access to digital infrastruc- as a percentage of monthly GDP per capita. ture. Across Commonwealth Asia, Brunei 3. Taxation: measured by tax as a percentage Darussalam, Malaysia and Singapore scored of total cost of mobile ownership and sec- highest on taxation, with scores of 98, 93 and 91 tor-specific tax, as percentage of total cost respectively. The rest of the region had reason- of the mobile technology. able tax scores, with Pakistan and Bangladesh 4. Inequality: measured as inequality in scoring the lowest. income, using the Atkinson measure5 On income inequality, South Asian countries, Commonwealth Asia including Bangladesh, Pakistan and India, had higher inequalities, with scores of 73, 70 and 66. Figure 7 illustrates the ranking scores on Southeast Asian countries such as Singapore affordability of digital enabling tools, such as and Malaysia had lower income inequality and mobile technologies, across the Commonwealth thus performed better with scores of 50 and 39, Asia region. respectively. Figure 7. Affordability of digital infrastructure – Asia 100 90 80 Affordability score 70 60 50 40 30 20 10 0 Singapore Sri Lanka India Malaysia Bangladesh Pakistan Brunei Darussalam Mobile tariffs Handset prices Taxation Inequality Source: GSMA database and authors’ own depiction
14 The Digital Infrastructure Divide in the Commonwealth Figure 8. Affordability of digital infrastructure – Europe 100 Afforiability score 80 60 40 20 0 Mobile tariffs Handset prices Taxation Inequality United Kingdom Malta Cyprus Source: GSMA database and authors own depiction Commonwealth Europe Commonwealth regions. Malta had a score of 81, Figure 8 shows ranking scores on affordability of followed by Cyprus with 77 and the UK with 70. the digital infrastructure in the Commonwealth Europe region. Commonwealth Africa In terms of the mobile tariff scores, the UK Figure 9 shows the ranking scores on affordabil- ranked highest with 85, indicating the low cost ity of digital enabling tools in Commonwealth of data and thus making use of the internet Africa. more affordable. Malta ranked second, with a Mobile tariff scores illustrate the high costs score of 59 and Cyprus third with 54. As such, of data in Commonwealth Africa relative to the Commonwealth Europe region performed other regions, such as Asia and Europe. Ghana, relatively well in relation to cost and affordabil- Botswana and Namibia scored highest in terms ity of data in comparison to other regions. of affordability in the region, with 61, 52 and 50 On handset prices, the UK scored the high- respectively. Other countries had scores below est at 94, indicating that it had the cheapest 50, with The Gambia, Lesotho and Malawi hav- internet-enabled mobile devices, followed by ing the least affordable mobile data. Cyprus and Malta. In relation to handset prices, Africa again The amount of tax paid on enabling mobile had the highest costs relative to other regions technologies also varied across the region, of the Commonwealth. Botswana, Nigeria and although tax rates in Commonwealth Europe Namibia had the lowest cost, with scores of 66, tended to be low. Malta had the highest score 47 and 43, respectively. Rwanda, The Gambia of 76, the UK was close with 75, while Cyprus and Malawi had the highest cost for handsets followed with 59. with low scores of 18, 8 and 1, respectively. Income inequalities exist in the region; In relation to taxation, Nigeria, Lesotho and however, Europe performs better than other Botswana performed better in comparison to Figure 9. Affordability of digital infrastructure – Africa 90 80 Affordability score 70 60 50 40 30 20 10 0 na a ia ria a a i da e a o i in aw an ny bi bi qu th ib at ha an ge m am al m so w Ke bi w G Rw Za M Ni ts Na m Le Es G Bo a e oz Th M Mobile tariffs Handset prices Taxation Inequality Source: GSMA database and authors own depiction
Trade Competitiveness Briefing Paper 2021/01 15 Figure 10. Affordability of digital infrastructure – Caribbean and Americas 90 Affordability score 80 70 60 50 40 30 20 10 0 Canada The Bahamas Barbados Jamaica Saint Lucia Trinidad and Guyana Saint Vincent Tobago and the Grenadines Mobile tariffs Handset prices Taxation Inequality Source: GSMA database and authors own depiction other countries in the region. Nigeria had a to the income levels of the population, with all score of 88, Lesotho 87 and Botswana 85. On countries scoring below 41. the other hand, Ghana, Malawi and Zambia On handset prices, Canada, The Bahamas ranked the lowest on this measure, with scores and Jamaica had the highest affordability scores, of 42, 39 and 9. with 84, 71 and 64 respectively. The rest of the Income inequality is also a major factor Caribbean performed lower, with Saint Vincent in digital infrastructure affordability across having the lowest score of 45. Commonwealth Africa and results in a sig- In relation to taxation, Trinidad and Tobago, nificant digital divide. The region’s highest Canada and Saint Lucia performed better than affordability score in this area was below 50, the rest of the region, with scores of 83, 60 and 56, with Ghana, Nigeria and Mozambique scor- respectively. The rest of the countries in the region ing 49 and 42, respectively. The rest of the had scores between 28 and 55, with Jamaica hav- region performed poorly, with inequality ing the lowest affordability score of 28 on taxation. scores below 34. On inequality, the region performed better relative to digital infrastructure affordability Commonwealth Caribbean and Americas than Commonwealth Africa, with Saint Vincent, Figure 10 shows the scores on affordability of Canada, and Trinidad and Tobago have the digital enabling tools across the Commonwealth highest scores of 71, 67 and 58, respectively. The Caribbean and Americas region. rest of the Caribbean region had scores below 50, In relation to mobile tariffs, Canada was the with Barbados having the lowest score of 29. most affordable, with the highest score of 79, followed by The Bahamas at 64 and Barbados Commonwealth Pacific at 41. The rest of the Caribbean region scored Figure 11 shows the ranking scores on afford- below 41. With exception to Canada, the cost of ability of digital enabling infrastructure across data in the Caribbean region was high relative the Commonwealth Pacific region. Figure 11. Affordability of digital infrastructure – Pacific 100 Afforability score 80 60 40 20 0 Australia Fiji New Papua New Solomon Tonga Vanuatu Samoa Zealand Guinea Islands Mobile tariffs Handset prices Taxation Inequality Source: GSMA database and authors own depiction
16 The Digital Infrastructure Divide in the Commonwealth In terms of mobile tariffs, Australia had Commonwealth Asia the highest score of 83, followed by Fiji at 78 Figure 12 shows the performance of software and New Zealand at 47. The rest of the Pacific and application infrastructure scores for the scored below 37, with Samoa having the low- Commonwealth Asia region. est score of 7. In common with the Caribbean In relation to online security, Singapore region, the high cost of data is a large contribu- ranked the highest in score with 90, followed tor to the digital divide in Commonwealth by Malaysia at 89 and India at 72. Sri Lanka and Pacific countries. Pakistan with Maldives scoring the lowest. On handset prices, Australia scored the high- In relation to the literacy rate scores, Maldives est at 100, like Singapore in the Commonwealth performed best with a score of 98, followed by Asian region. Fiji ranked a close second at 94 Singapore and Brunei Darussalam at 97, and then and was performing at par with countries in Malaysia at 95. India, Bangladesh and Pakistan Asia on handset costs. The rest of the Pacific scored lowest at 74, 74 and 59, respectively. scored are between 46 and 36. In relation to accessibility of top ranked apps, On taxation, mobile technologies were rela- Singapore scored the highest at 100, followed tively more affordable in the region in compari- by Malaysia at 58 and Brunei Darussalam at 50. son to the Commonwealth Africa and Caribbean Sri Lanka and Pakistan scored the lowest at 21 regions, in line with some Commonwealth and 20. Asia countries. Solomon Islands had the high- In relation to apps developed per person, est score of 97, followed by Australia and New Asia performed better than other regions of Zealand at 88, and Vanuatu at 87. the Commonwealth. Singapore, Malaysia and Regarding income inequality, Tonga and Maldives had the highest scores of 100, 82 Papua New Guinea have the highest score of 78. and 80, respectively. Pakistan and Bangladesh This is followed by Fiji and Australia with scores scored the lowest at 64 and 53. of with scores of 72 and 69. The rest of the Pacific In relation to mobile social media pen- countries have scores ranging from 56-64. etration, Brunei Darussalam, Malaysia and Singapore scored the highest at 94, 81 and 80, 4.3 Digital divide in relation to literacy respectively. Lagging behind were Bangladesh, and software and application services scoring 22, and Pakistan, with 17. An assessment of literacy levels, coupled with Commonwealth Europe online security and access/development of soft- Figure 13 shows the performance of soft- ware application skills, provides an important ware and application infrastructure in the final layer of the information technology analy- Commonwealth Europe region. sis. These are important factors in the digital In relation to online security, the UK had the infrastructure assessment in terms of it con- highest score at 93, followed by Cyprus at 65 necting with last mile users and customers. and Malta at 48. Figure 12. Performance of software and application infrastructure – Asia 100 90 80 Performance scores 70 60 50 40 30 20 10 0 Singapore Malaysia India Brunei Bangladesh Sri Lanka Pakistan Maldives Darussalam Online security Literacy Accessibility of top ranked apps Apps developed per person Mobile social media penetration Source: GSMA database and authors own depiction
Trade Competitiveness Briefing Paper 2021/01 17 Figure 13. Performance of software and application infrastructure – Europe 100 Performance Scores 80 60 40 20 0 Online Security Literacy Mobile Social Apps developed Accessibility of Media per person top ranked apps Penetration United Kingdom Cyprus Malta Source: GSMA database and authors own depiction In terms of literacy scores, meanwhile, the In relation to online security, Mauritius led, region performed better relative to other regions with a score of 88, followed by Kenya with of the Commonwealth, led by the UK and 75 and Rwanda with 70. Eswatini, Namibia Cyprus with a score of 99 and Malta with 95. and Lesotho scored lowest, at 13, 13 and 5, Accessibility of top ranked apps was also respectively. high, with the UK scoring 100, followed by On literacy, Namibia, Mauritius and Eswatini Malta at 93 and Cyprus at 79. scored the highest at 92, 91 and 88, whereas Apps developed per person in the region Mozambique, The Gambia and Sierra Leone was high, with Cyprus having a score of 97, scored lowest with 61, 51 and 43, respectively. followed closely by the UK at 96 and Malta In relation to access to top ranked appli- at 94. cations, Sierra Leone, Mauritius and Ghana Mobile social media penetration scores for scored highest, with 70, 68 and 67, respectively. the region, meanwhile, were also relatively high Zambia, Eswatini and The Gambia scored the with Cyprus scoring 82, Malta scoring 80 and lowest at 11, 5 and 3, respectively. the United Kingdom at 66. On apps developed per person, Mauritius ranked the highest at 79, with South Africa at Commonwealth Africa 75 and Kenya at 62. Zambia and Sierra Leone Figure 14 shows the performance of soft- scored the lowest at 39 and 29, respectively. ware and application infrastructure in the In terms of mobile social media penetration, Commonwealth Africa region. the region scored lower than other regions of Figure 14. Performance of software and application infrastructure – Africa 100 90 Performance scores 80 70 60 50 40 30 20 10 0 i us ny a da ric a er ia nd a an a na bi a bi a qu e ne tin ia th o iti n ha bi o a ib r Ke wa Af Ni g a w m am Le sw am es o au R h Ug ts G Za G am ra E N M ut Bo e oz er L So Th M Si Online security Literacy Accessibility of top ranked apps Apps developed per person Mobile social media penetration Source: GSMA database and authors own depiction.
18 The Digital Infrastructure Divide in the Commonwealth Figure 15. Performance of software and application infrastructure – Caribbean 100 Performance scores 80 60 40 20 0 Barbados Th Bahamas Trinidad and Saint Guyana Saint Lucia Jamaica Tobago Vincent and the Grenadines Online security Literacy Accessibility of top ranked apps Apps developed per person Mobile social media penetration Source: GSMA database and authors own depiction the Commonwealth, such as Asia and Europe. and the Grenadines have scores of 88, followed Mauritius performed best with a score of 67, by Guyana with a score of 86. followed by Botswana with 42 and South Africa On access to top ranked apps, the region with 37. The lowest performing countries were was performing well, scoring 100 across all Mozambique, with a score of 8, Uganda with a countries. score of 6 and Rwanda with score of 5. On apps developed per person, the scores varied, with Saint Vincent and the Grenadines Commonwealth Caribbean and Americas having a score of 95, Barbados at 94 and Saint Figure 15 shows the performance of software and Lucia at 77. Trinidad and Tobago had a score of application infrastructure in the Commonwealth 69, Jamaica 66 and Guyana 53. Caribbean and Americas region. For mobile social media penetration, the In relation to online security, the region as a scores were relatively lower overall, with whole was not performing well. Jamaica had a Barbados scoring 65, The Bahamas 64, and score of 41, followed by Trinidad and Tobago Trinidad and Tobago scoring 61. Guyana with 19 and Barbados and Saint Vincent and the and Saint Lucia had scores of 54 and Jamaica Grenadines at 17. The Bahamas, Guyana and Saint scored 44. Lucia had scores of 15, 13 and 10 respectively. In terms of literacy, the region was per- Commonwealth Pacific forming well, with Barbados scoring a perfect Figure 16 shows the performance of soft- 100, Trinidad and Tobago scoring 99 and The ware and application infrastructure for the Bahamas scoring 97 Jamaica and Saint Vincent Commonwealth Pacific region. Figure 16. Performance of software and application infrastructure – Pacific 100 Performance Scores 80 60 40 20 0 Australia Fiji New Zealand Papua New Tonga Vanuatu Samoa Guinea Online Security Literacy Accessibility of top ranked apps Apps developed per person Mobile Social Media Penetration Source: GSMA database and authors own depiction
Trade Competitiveness Briefing Paper 2021/01 19 In relation to online security, Australia scored digital divide challenges women face across the highest at 89, followed by Fiji at 79. The rest of Commonwealth. the region then dropped off significantly, with Globally, one in three young people between New Zealand scoring 37, Papua New Guinea the ages of 15 and 29 reside in Commonwealth scoring 21, Tonga 19, Vanuatu 13 and Samoa 10. countries. They constitute around 640 million In relation to literacy, the region performed of the Commonwealth’s total 1.8 billion popula- very well, with Australia, Fiji, New Zealand, tion. The integration of women into the digital Papua New Guinea and Tonga all having scores economy is therefore critical to bridging the of 99. Samoa followed with a score of 88 and digital divide. then Vanuatu with 72. This section assesses various regional fac- In relation to accessibility of top ranked apps, tors affecting women’s ability to access, afford Australia and Fiji had perfect scores of 100. and utilise digital technologies and infrastruc- Vanuatu and Samoa have scores of 76 and 61. ture. The following factors were taken into New Zealand, Tonga and Papua New Guinea account: Vanuatu and Samoa had scores of 55, 30 and 21. On apps developed per person, Australia was 1. Gender parity in schooling: measured by the scored at 95, Fiji was scored at 94, New Zealand mean years of schooling of males versus had a score of 93 and Papua New Guinea had females. a score of 92. Samoa, Tonga and Vanuatu had 2. Gender parity in income: measured by scores of 74, 64 and 43 respectively. gross national income (GNI) per capita of On mobile social media penetration, the females to males. region needed to improve its access relative to 3. Gender parity in bank account ownership: other regions. Fiji, Australia and New Zealand measured by gender parity in having an had scores of 72, 70 and 66. Papua New Guinea, account. Tonga and Samoa had scores of 64, 62 and 31, 4. Gender gap in social media use: measured respectively, and Vanuatu had a score of 8. by gender ratio for social media usage. 5. Gender gap in mobile ownership: measured 4.4 Digital divide in relation to gender in by gender ratio for mobile device owner- ship and usage. the Commonwealth Assessing the digital divide in the Figure 17 shows the gender divide in relation Commonwealth in relation to education, to access, use and affordability of digital infra- income levels, access to and use of digital structure in the Commonwealth Asia region. infrastructure from a gender perspective is The gender parity scores illustrate the dis- important to understand the nature of the parity between men and women in relation to Figure 17. Gender digital divide – Asia 100 90 80 Performance score 70 60 50 40 30 20 10 0 Singapore Maldives Brunei Malaysia Sri Lanka India Bangladesh Pakistan Darussalam Gender parity in schooling Gender parity in account ownership Gender parity in income Gender gap in social media use Gender gap in mobile ownership Source: GSMA database and authors own depiction
20 The Digital Infrastructure Divide in the Commonwealth schooling, account ownership, income, social The disparity in mobile device ownership media usage and mobile ownership. also showed a large gender digital divide in the In relation to schooling, India, Pakistan and region. The South Asian countries of Pakistan, Bangladesh lagged behind on female school- Bangladesh and India scored lowest, ranging ing. India ranked the lowest with a score of between 0 and 34, while Sri Lanka performed 43, behind Pakistan at 44 and Bangladesh at better but still with a large disparity, with a score 70. Brunei Darussalam, Maldives, Malaysia, of 67. Malaysia scored 81, while Singapore, Singapore and Sri Lanka performed better in Maldives and Brunei Darussalam demon- relation to education of females, with Brunei strated higher parity, all with scores above 90. Darussalam having the highest score of 100, sig- Overall, in Asia, there is a strong relationship nifying gender equality in education. Maldives between the years of schooling and the owner- and Malaysia also led with scores of 96, followed ship of accounts, income, social media use and by Singapore with 90 and Sri Lanka with 87. mobile ownership. The greater the gender par- In terms of ownership of accounts, Pakistan ity in the years of schooling, the worse the per- scored lowest at 7, signifying a large disparity formance in other areas creating greater gender between men and women, while Bangladesh divide. and Brunei Darussalam also scored rela- tively low compared to other countries in the Commonwealth Europe Commonwealth Asia region, with scores of 48 Figure 18 shows the gender divide in relation and 76, respectively. Maldives, India, Malaysia, to access, use and affordability of digital infra- Singapore and Sri Lanka led the region with structure in the Commonwealth Europe region. scores ranging between 81 and 99. The scores show that gender parity is better Regarding the gender divide on income, in comparison to other regions in this more except for Singapore, the scores across developed region; however, the gender digital Commonwealth Asia were all below 80. This divide remains. signified large income gaps between men and In relation to gender parity in schooling, the women in the region. Pakistan scored lowest UK, Cyprus and Malta performed well with with 13, India was 19, Sri Lanka 36, Bangladesh gender parity scores above 93. 38, Maldives 44, Malaysia 60 and Brunei Regarding account ownership, the scores Darussalam scored 75. were also high in all the three countries, In relation to the gender gap in social media between 99 and 100, signifying parity or near- use, Pakistan, India, Bangladesh and Sri Lanka parity. This indicates that for women, access to showed huge gender disparity, with scores from finance is easier in comparison to other regions. 0 to 20. Brunei Darussalam was in the middle However, in terms of affordability, measured range, with a score of 74. Malaysia, Singapore by the income level, gender parity in income was and Maldives had small gender gaps in social low in these countries. The United Kingdom media use; however, in comparison to the rest and Malta had scores of 53, while Cyprus had of the countries in Commonwealth Asia, their a score of 70. This is an area for improvement. performance was much closer to parity with In relation to the gender gap in social media scores of 90–98. use, the scores were relatively better. Cyprus, Figure 18. Gender digital divide – Europe 100 Gender Parity Score 80 60 40 20 0 Gender parity in Gender parity in Gender parity in Gender gap in Gender gap in schooling account income social media use mobile ownership ownership Cyprus United Kingdom Malta Source: GSMA database and authors own depiction
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